Orrstown Financial Services Inc (ORRF) said Wednesday it slipped to a net loss for the fourth quarter, from a profit last year, hurt mainly by one-time goodwill impairment charges, increased provision for loan losses, and a drop in net interest income.
The Shippensburg, Pennsylvania-based company reported fourth-quarter net loss of $20.5 illion or $2.54 per share, compared to net income of $4.4 million or $0.55 per share last year.
Results for the quarter include goodwill impairment charge of $19.4 million, excluding which adjusted loss was $1.5 million or $0.18 per share.
Wall Street analysts expected earnings of $0.28 per share for the quarter. Analysts' estimatest typically exclude special items.
Orrstown said that as a result of the fourth-quarter loss, its return on assets and return on tangible equity ratios were negative, compared to 1.15 percent and 12.22 percent, respectively, in the same period last year.
The company reported net interest income of $11.6 million for the quarter, down 5.5 percent from $12.3 million a year ago, reflecting decline in both rate and volume. Net interest margin for the quarter slid to 3.45 percent from 3.60 percent in the prior year.
Noninterest income, excluding securities gains, for the quarter fell to $4.4 million from $4.7 million last year. Securities gains for the quarter totaled $3 million, up from $0.4 million a year ago.
Noninterest expenses for the quarter spiked to $30.5 million from $10 million last year, reflecting goodwill impairment charges.
Provision for loan losses for the quarter was higher by $1.4 million at $12.6 million, year-over-year.
As at December 31, 2011, the company had assets of $1.45 billion, compared to $1.51 billion in the prior year. Total loans receivable at the end of the period was flat at $968 million. Deposits rose 2.4 percent to over $1.2 billion at December 31, 2011, compared to last year.
ORRF closed Wednesday at $8.84, down $0.83 or 8.58%, on the Nasdaq. In after hours, the stock lost $0.11%.
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